Bangladesh Commercial Bank

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Dividend Discount Model:
1.General Investors are expecting that Bangladesh Commercial Bank Limited (BCBL) will pay a Tk. 10 dividend at the end of year 1, Tk. 20 at the end of year 2, Tk. 25 at the end of year 3 and then they plan to sell the stocks for a price of Tk. 200 per share. The T-bill return is 5%, market return is 10% and the relevant beta is 1.2. What will be the value of the bank’s stock?

Constant Growth Model:
2.XYZ bank pays a dividend of Tk. 15 per share today and dividends are expected to grow by 5% a year thereafter. The relevant required rate of return is 10%. Calculate the bank’s stock price.

Mixed Approach:
3. Investors are expecting that Bangladesh Commercial Bank Limited (BCBL) will pay a Tk. 10 dividend at the end of year 1, Tk. 20 at the end of year 2, Tk. 25 at the end of year 3 and thereafter dividend will grow by 10% forever. The T-bill return is 5%, market return is 10% and the relevant beta is 1.2. What will be the value of the bank’s stock?

ROE:

4. The financials of BCBL are given below:

Net income after tax= $1million
Net income before tax and security gain and loss= $1.3 million Total Operating revenue= $39.3 million
Total assets= $122 million
Total equity= $7.3million

Calculate the ROE of BCBL.

ROA:

5. The following financials are for Bangladesh Credit and Deposit Bank Limited (BCDBL).

Interest income TK.1, 875Lakh
Interest expense Tk. 1,210Lakh
Total assets Tk.Tk.15, 765Lakh
Noninterest income Tk.501Lakh
Noninterest exp. Tk.685Lakh
Security gain Tk. 41Lakh
Tax Tk.16Lakh
PLL Tk.10Lakh

Calculate ROA for BCDBL
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